Khiron Life Sciences Corp.

Good morning, everyone. Thank you for joining us here today.

It is Chris Naprawa, Chairman of Khiron Life Sciences. I’m joined by CFO, Wendy Kaufman and CEO, Alvaro Torres.

We are going to give you a little review of the quarter. I'd ask everyone to refer to the legal notice on top on your screen right now for any forward-looking statement et cetera, read that at your leisure.

So, we're really pleased to present today's numbers. We'll have Wendy do a little bit of an overview on the numbers and Alvaro will give you an sort of an operational update.

But, Q2 marks the end of where Khiron is building and now we’re focused on sales execution. We came through a really, really tough time in the quarantine during the last -- March and April being the worst of it.

We will give you a bit of an update that we’re -- from a clinical side, we're pretty much back to normal and we're making sales in multiple countries now. So really exciting time here at Khiron.

I'm going to turn it over Wendy to give you a quick overview of the financials, and we will get to all your questions as with a hard stop at noon Eastern today. So, I'll turn it over to Wendy.

Thanks Chris. Just a quick overview of of Q2 results.

So we recorded a loss of $5.7 million in the quarter. So this is almost $4 million less than we reported last year second quarter of $9.5 million, and this is largely due to the fact that our G&A has gone down and we're starting to see the positive effects of the commercial operations in Bogota.

So in the second quarter, we saw advancements in medical cannabis sales in Columbia and we also saw -- we also benefited from full commercialization at our cultivation site. So pretty much all of our harvest in the second quarter was for commercial purposes.

And so what that means for our financial statements is we end-up recording a 700,000 fair value gain on our biological assets. So this is the first quarter that we see that going through our income statement.

And also we were able to capitalize about $500,000 in inventory, which is related to harvested plants, as well as extracts. If you want more details, I won't get into all the finicky stuff, but if you want more details on how we calculate the fair value then just please refer to our financial statements, note number six.

COVID-19 had financial effects obviously for our financial statements. And so this included reduced revenues at our health centers, and that's largely due to the fact that we had less patients coming into the clinic and that was for safety precautions.

And also we have to postpone all of our invasive surgery. Now those surgeries started again at the end of May.

And so in June, we start to see a resurgence in that revenue again at our health centers. And then, so also just one other thing with COVID was we reacted very quickly to the pandemic.

And as a result, we were able to put measures and to reduce our costs, in particular, you're going to see that in our G&A and marketing costs. And so we have reduced salaries from reduced actual payroll reductions, as well as reduced headcount.

We have less travel and also less office costs. So those are -- that's a very quick summary of our second quarter.

But I think that really highlights the key things that happened in 2Q. And so I'll just turn it back to either Chris or Alvaro.

Thank you, Wendy. I’ll turn it over to Alvaro just for a couple of quick comments.

And then we can had a go around the roll that role and give everybody an update on what's going on and then we'll get right into some of these questions.

Well, first of all, thank you very much for everybody for joining us today. Q2 was certainly [technical difficulty] with a lot of challenges plus a lot of accomplishments.

And I think what we are seeing today on August 24 the things to date, we are in a position that very encouraging for the company in the next 12 months ahead. So just to recapping on what we said, I think we did a tremendous work on reduction of our SG&A once we started seeing that the pandemic was certainly went into effect -- affect our operations, I think we had 23% reduction on SG&A compared to first quarter of this year and also around 20% compared to the same quarter on 2019.

And I think that shows you the commitment of the company to be able to focus on execution and sales. In the clinic business, we were hit significantly by the COVID pandemic by the quarantine order by the government.

To give you all an idea in the month of April, we dropped about 50% of our patient visits, up from February where we were going in a very good trend, because we've got quarantine and the pandemic. Now patients don’t go out, there’s liminations on the type of surgeries or the type of service that we can offer.

But I guess what I'm really proud is the fact that we were able now in July post Q2 to be able to reach the same level of patient services as we had in January in the middle of the pandemic, now with 10,000 -- 9,000 patients a day, we've been able to sort of go back and start pushing and be able to convince patients and treating them in a safe way. So we’re looking at a Q3 that's going to be a lot better than what we had in Q2 with the drops that we had that I just mentioned in April.

One of the reasons we were able to do that is because we switched to telehealth to give everybody an idea. When we launched telehealth in April without our own system, 8% of our patient attentions were now on telehealth.

In month of August, what we've done so far that number is above 19%. So that means in the month of August, which is reaching to be I would say 8,000 to 8,500 patient services a day -- a month, 18% of those are coming from telehealth.

And that's a significant measure, because if we haven't been able to make a switch really quick, and now we've implemented a new iPhone-based, android-based and web-based telehealth platform. If we hadn't done that, I don't think we'll be reaching the levels of patient services that we have so far.

So we're looking at Q3 certainly very interesting. The same thing is when we have said, we dropped some surgeries in the month of April, March and May.

We got back up in June. And that's significant for us, because that means a lot more revenues for us.

And one of our goals is to be able to keep bringing patients to our clinic. I think we're going to, as I said last time when we were in this webinar, we're making a big push towards telehealth.

I think that 18% figure that I just mentioned speaks for a story which the company wants to be able to have at least 50% of our patients in telehealth again this year. As you know with all the challenge that that brings we're seeing tremendous acceptance, the moment that we keep improving our systems and the ability for us to be able to be reach a consumers.

So I think the clinic business, which is paramount for us, because that's where we get most of our patients despite the fact that we had a big drop at the beginning of the second quarter, we're seeing now in the middle worst time of this pandemic that we're able to reach really good numbers back in February and hopefully, we continue this trend and we'll be able to be making sort of making up for all that lost time that we had over the next four months. In terms of [Indiscernible] program which is the core of the company.

I mean, we -- as you all know, we got accepted our certification to be start selling one day before the quarantine in Colombian during the last 100 days of the very significant challenges, be able to bring patients to the clinic. But today we're seeing a situation where we're seeing tremendous growth on this.

Just to give you all an idea, it took us about 47 days since we started to reach our first 100 prescriptions. We announced on July 27 that we have reached 1,000 prescriptions.

I am very confident that we will reach the 2,000 prescriptions by the end of this week. And that means that overall it's taking -- takes us now five days to reach 200 prescriptions, whereas it took us more than 70 days to get to the first 200.

And to give you an idea of what that means. In Q2, we had an average of seven patients per day, 30 prescriptions per day in average, I'm talking calendar days.

And the definitely the month of August the last week, we reached about 42 prescriptions per day. So when you go of Q2 getting seven prescriptions a day to now what we're doing 42 a week every five days in the middle of this pandemic, I think just shows us, show all of you the amount of tenacity and all the things that we do on a day to day basis to get moved up as prescribed and this is all inside of clinics.

So the more patients we can bring, the more we can get out of this situation of pandemic and the more cost we are to it. We're convincing doctors and patients every day, more and more to be able to join our cannabis product.

So that's very exciting for us, because that's -- those trends which is what we should be looking for are going to show us that we could have very good Q3 and more excellent Q4 and only in Colombia. In terms of what we're doing internationally, as Chris said, I think Q3, you're going to be able to see that we’re already reporting sales in Colombia, in UK and in Germany.

We announced recently the deal that we have for distribution Germany, and I'm very proud to say that we already have, we have our first invoices there by the end of September, the same thing in UK. Many of you may have seen or not, some of the news that have been coming out of Scotland, and the UK with project 2021, with patients that are taking our medication, our [pills] in the UK.

In fact, I think Khiron is the first company to be able to put product in Scotland legally and this is all part, these relationships we have for 2021. 2021 is a program that aim to reach 20,000 patients by the end of next year.

I think right now there are about half of that until given idea of what that means for us. Every patient has an allowance, expenditure of £150 per month, that would be roughly about £2,000 per year, and there's five companies in this program and Khiron is the only Latin American exclusive provider for this product.

That could mean for us and that will mean for us tremendous growth in 2021 and we’re going start seeing tremendous growth also in the next four months. Since we've already identified patients, we already gone through all the hassles of being able to get approached into patients’ hands, particularly in this time of pandemic being able to do that I think is very significant.

So that's what we're doing for UK and Germany. I'm very excited about those markets.

Germany is a proven market for medical cannabis and now we're proving that we can be one of the players in the market and the UK, I think same could be even more exciting than Germany and starts to grow a little bit slower. But what we're seeing today is as the more patients getting to this program and start becoming -- is noble, and we are fully prepared to be able to supply that market and we'll see that over the next four months.

In terms of the rest of Latin America, we’ve said that we're focused on Colombia, Peru and Brazil. We are very close to starting sales in Peru.

As you may all know, we already announced that we have all the permit to import and export high CBD products into Peru. We are expecting to be able to start sales in Peru by the end of Q3, where we’re confident about that we can do it even in this pandemic, which brings you a lot of challenges not only in regulation but also time and speed and logistic.

But I think our company has a good knowledge of how to get those things done, so we're very comfortable with that. And in terms of Brazil, we’re still looking positively at Q4 for this year, Uruguay has recently announced a couple of regulations are going to be very good in part Brazil.

So moving ahead significant in terms of medical cannabis. The government just issued very recently a new decree, a new draft, a new decree that's going to allow cannabis to be in the part of the medical system, that’s going to allow for better generic drugs in Brazil and that's going to allow cultivation and growth in Brazil by the time that happens, our plan is to be able to leverage all these distribution partnerships that we've been announcing recently, so that we can create a dominant position in Brazil.

So that's what's happened in terms of our medical situation, what happened in Q2 and what's happening right now. And I'm more interested in always looking at what those trends look like.

When you can go again from seven prescription to 42 prescriptions a day in the last five days that starts to show a lot of momentum. And momentum is something that we’ve always being waiting to gain, now we're gaining as everybody knows for company, everybody knows our clinic.

The day we did that first in Colombia, about two weeks ago we had almost 900 calls on the phone line to be able to get prescription. So those are the type of things that we're going to be pushing more in the next four months.

Now we're seeing also some clinics in Colombia that are getting to medical cannabis, all the clinical that being announced are clinic that are being trained by Khiron on medical cannabis. So we're very excited that outside of Bogota we can see more partnerships coming to fruition, more external doctors being able to prescribe.

And I think by the time this pandemic is hitting lower numbers, we'll be able to have a very sustainable position, considering what we have done in the middle of the worst time. So I think I'm very excited about it.

In terms of our CBD [cleanup] platform, you've seen recent announcements we're able now to getting stable, hoping to see significant revenues coming out the next Q3 and we recently announced partnership in Hong Kong that's already has a firm order and we expect that to be able to be reflected in Q4. And the way that Kuida is growing, we reached a lot to our digital strategy with Kuida skincare, we are working on tremendously interesting things to be able to distribute these products across Latin America and we’d be talking about that very soon as well.

And I think our growth, our brands, our patients, we are now talking about patient experiences on across Colombia and across LATAM and that type of thing start to bring us a lot [Indiscernible] and goodwill. So despite the fact that Q2 was very difficult for us in terms of operations, we did a significant reduction in our SG&A and our cash burn as well.

That gives us I think very good run way for execution of our business plan. I think what's going to happen in the next four months, five months, we are going to be able to get into five countries that we already mentioned.

Everything that we are doing in Colombia is a learning curve that's going to help us tremendously in Peru, Brazil, the UK and Germany. And so, we are looking very positively at the future despite the fact that we are in middle of a very big crisis in LATAM and the rest of world.

But quarantines and pandemics we'll start to ease up in these regions. So we are well prepared for that.

And I think the fact that our team has been able to accomplish and get out of that negative April, May type of results and operational difficulties, I think speaks volumes to our focus that where we want to be our clinics Zerenia has been open, its beautiful, everybody that goes there and the more patients that doctors that go there they like more, and that's for us to be a lot of traction for what we're doing. So those trends, those numbers, prescriptions per day, doctors prescribing all of that starts to show us that there's momentum, that there's definitely interest from people on learning about cannabis and being prescribed.

So you have a thousand calls a day just one [indiscernible] middle of day, the lunch break in the biggest news media in Colombia that shows you there's a lot of appetite. It's just matter of being able to leverage our telehealth platform successfully, being able to have more appointments with doctors, being able to work with patients so that look at how can they afford these programs in the long run, the short run and we are working on all of these things.

So e are looking at the last two and months and month and half of tremendous growth and tremendous success in terms of the message that we want to make. So I think that, we take it up for questions, and more than happy to answer.

Sure. Thank you, Alvaro and thank you, Wendy.

So we’ll just kind of work our way through a few of these questions. There's always questions on guidance, and we'll say the same thing that we say every quarter is that, the company's just not in a position to offer guidance at this time.

But what we did say last quarter, let's recap what we said last quarter. We said that don't expect anything great of Q2 from revenues.

We knew things are tough in the middle of the pandemic, but expect our expenses to go down. So in Q3 and Q4, I think our expenses are about as low as they're going to get, but now you're going to start to see revenue start to hit the top line, not only from Colombia but other regions as well.

So then what we said in the last quarter was that we expect that it’d be cash flow neutral, cash flow positive in the first part of 2021, and we're going to stick by that statement. Again, COVID -- allowance for COVID get much worse around the world, but things are looking a little bit better right now.

But your guess is as good as mind on that. But we're feeling very, very positive on that for next year.

There is two questions in here that I'll answer both of them the same. The question that comes up often times is about, would you ever consider a NASDAQ listing, or would you uplist to NASDAQ?

We've done a great deal of work and looking into that. We decided not to do that for now.

We don't qualify for that. Right now you need too lower stock price among other things, there’s ways that you can manage that.

But we just not -- considering not right at the moment. But maybe you can answer this question is what are our plans right now for Mexico?

There has been some news on Mexico lately?

Yes. Well Mexico, as you know have been delayed for quite for time, they [technical difficulty] what was going to happen have been sort of waning off with the delays.

There has been good news in Mexico recently about the plan that we have to legalization and be able to start at least on the medical side. Right now, I don't really expect much of Mexico happening in the next four months, at least by the end of this year.

We are very ready to be able to enter Mexico next year. We don't have to be the first ones to enter.

I think the reputation that we have already with patients and doctors is going to speak for itself and we already have a lot of conversations with potential partners on how we can bring that many [indiscernible] with those programs into Mexico. There’s still some regulations things hurdles to have to go through.

In the meantime, we're going to be focus on Colombia, Peru and Brazil. And everything that we do in these countries is going to have meaning for us, a lot more leverage than we actually get into Mexico with all the perspectives that our country has.

I mean, Mexico has tremendous opportunities in just a matter of being able to have a final regulation that allows us to get in. So we're working for that in Q1, 2021.

It’s a market that has probably $10 million to $11 million of potential patients. And I think the more they start to see how this is working LATAM, the more faster we'll start implementing this, and for us we have all these [Indiscernible] to continue building our brand and being the company that everybody wants to work with [technical difficulty].

Thank you for that. Wendy, there's a couple of questions here just on revenue breakdown between Kuida clinics et cetera.

Maybe we can just give a kind of high level view on the revenues breakdown into those buckets.

So for the second quarter health services is about $1.6 million and medical cannabis is 25,000 and Kuida with the wellness products are 54,000. So that’s breakdown.

You can also see in our MD&A on Page 9, if that's helpful as well.

All right, thank you for that. We'll move on to, Alvaro, there is couple questions here on where we're selling in Colombia on the medical cannabis side, maybe you can rattle off a few of the cities that we're working in now.

And also, I think there's one question in particular should be [Indiscernible] helping with that. We're now recruiting outside clinics, or have recruited outside clinics in Colombia to sell products as well?

Yes. So most of our sales on medical cannabis are within our own clinic in Zerenia.

We do let's say 60% present and 40% on telehealth and those numbers are increasing so that we are going to really launch all the ads and marketing for Zerenia first week of September. We expect that the telehealth will be a big portion of that.

So most of our sales are in the clinics and Bogota which is the biggest -- the big you see. What we've done also we've been training doctors outside and we decided also couple of weeks, three weeks ago to start partnering with clinics outside of Bogota, so we can train them, so that we can do observe so that doctors in those clinics can come in and watch our doctor’s prescribed [life] of course with the patient permits and that helps us to narrow the gap between being trained and getting that first prescription.

We are working with clinics in Barranquilla, in Cali, and we are, our target is to be able to have at least another 15 clinics that we want to sign up as partners of Zerenia by the end of September. There is always, of course, the reason we do this, because other clinics want to learn how to prescribe medical cannabis.

We see this as an opportunity to spread the message around, of course keep building our brand and because our medical education platform is so well known, we have a lot of request to be able to partner up with other clinics so that all these doctors can start prescribing very soon. We already started to see prescriptions coming from outside into our clinic.

And by the end of the year, we hope that we can at least do as much as the same amount that we can do outside clinics with our own. And this will keep growing the more that people get to understand all the sanitation.

So that's what we're doing with the clinics outside. In the end with all the pandemic that have given us also a limited amount -- the capacity of our external clinics to really do their business.

But now the things are sort of coming back we see a lot of hunger from all these clinics to get trained and start prescribing and to partner with us, so that we can provide a title branded products to them, and for them to be able to use a new medication. So that's the plan to be able to have all these outside clinics to work with us.

And the fact that we have the last, the [Indiscernible] the fact that our clinic is the only dispensary in Colombia today that can dispense THC that is what we're working ahead so that we can get more doctors and more clinics to partner with us.

There's some other questions here, thanks for that on different markets. We already covered off Mexico.

Specifically on Kuida, as Alvaro’s mentioned, we're selling that primarily today in Colombia that first big order in Spain will ship soon enough and the Hong Kong order will ship in Q4. Just from a strategic point of view, we see a lot of value in building the distribution and overcoming all the regulatory hurdles that you have to get over in each one of these countries is the plumbing has value in itself, and that's where we've been focused on trying to do that.

Specifically in the U.S., we have no current plans. As we mentioned the last quarter, we did pull back our advertising spend in the U.S.

for the moment on Kuida. And as we set up and watch what’s going on in the U.S., Khiron is very much trying to be a pure play international company.

We think that a company like ours looks very attractive to these U.S. companies once they’ve done growing and consolidating in their own markets, they will look internationally as well.

So we're staying outside of that market and really focusing on Europe and South America for the time being. The question is here on Argentina, we have no current plans for Argentina.

I think Hong Kong and Mexico we have covered off. There's a question here from Ernst on the share buyback, we didn't buy any shares in Q2.

We still have that in place if we choose to use it. For the time being, we think we have other places to use our cash in expanding in these markets.

Uplisting we covered off. So there’s a couple of questions here just on average sale price of the product.

So I think, this is going to change a lot now that we're selling into Europe, but I think at about $60 CAD would be an average sale price for current 30 mil bottle that we're selling in Colombia. On an average sale price, you'll see that that number go up as we start shipping more and more into Europe.

Prices are much more favorable in the European market. I think most people know that right now.

So specific questions on margins in those, I want to answer those specifically, but north of 50%, I think would be fair in those markets in the early days. One question here on how many prescriptions.

I think just to reiterate Alvaro's point, we announced that first thousand, we're going to hit our next thousand, which is only about a month later this week at some point, we're very, very close. And we're starting to see that expand, because not only are we prescribing new prescriptions but others are coming back for refills, which is really great to see, because that's really where the model starts to saying.

Okay. There's question here from David about, do we partner with other Colombian licensed producers?

Yeah, we've got great relationships with guys in Colombia. We work closely with many of them.

It would be very likely that we start to partner with one or two of them for product, especially on the CBD side in Colombia. But we’ve got really great relationship with a number of those companies there.

When Kuida will be available in Canada? We're not really focused on the Canadian market at the time, but we know we have sent out some samples and the reviews have been great, which is really nice to see.

This is the question about from, I think we answered this one about external clinics and pharmacies. So I think we've signed up now six or eight external clinics and working with them.

I think we ship product into many of the different cities in Colombia, there are key Cartagena, Bogota of course, Medellín and Cali.

So just to comment on that. Out of everything that we've been doing in the clinics, 75% of our patients are in Bogota.

The other 25% have been prescribing, using telehealth and Dr. Zerenia, which is our platform from outside Bogota we [Indiscernible] so far as to be able to ship product to Leticia, which is the capital of the Amazon department in Colombia.

So we've been able to push ourselves a little bit a higher to be able to reach as many patients as possible. Of course not every patient outside Bogota has the ability to do telehealth call it connection, call it technology.

So that's why we’ve been talking to clinics, pain clinics mostly, oncology clinics. We just signed a deal with -- against cancer last week, so that we can train our doctors and those doctors who are mostly focused on oncology patients and pediatric care, they start to get trained and then they start the prescriptions with the patients.

And the more we get outside, and the more scope we can have outside of our network of clinics. And I think what we've been seeing lately is that [technical difficulty] calling us to see how they can get into these medical cannabis programs.

There's one clinic in [Lamentini] that's been advertising heavily that they've also open up medical cannabis clinic. I think that's all fantastic news particularly because we’re the one that trained them.

So we are very open to continue expanding the opportunities to partner with clinics outside of Bogota, and Bogota is a big city and [Indiscernible], while at the same time we keep focusing on improving our relationships with our clients, insurance companies and to be able to offer to, let’s say [Indiscernible] patients that are basic to use telehealth. And particularly, we're talking about anxiety, depression, sleep disorders.

Those are the type that we've been able to do with our telehealth platform. We’ve made significant push towards telehealth [Technical difficulty] drzerenia.com but also using that with Android and iPhone apps, which can allow us to be able to have video telehealth with the doctor, implementing the medical system inside their applications and just to -- this is all to make life easier for patients.

On the other side, we have a partnership with Locatel, which has just opened their pharmacy in Zerenia just last week. And with Locatel we’re also taking patients that are not able to get to telehealth, because they don't have the ability to get into the web or to use an app.

And so we’ve already started prescribing through Locatel. I think that pharmacy is going be a very good, particularly when things start to ease down and people have to get into more.

With Locatel we also have a big network of patients that are in their database more than a million patients that they have already in their database that we have now started to approach, to show them a different alternative for medication. And I think everything we do here, all these parameters that we are taking in the middle of this pandemic are going to be, we are using to be able to make sure that we can improve those ratings and continue in Brazil and the rest.

All right. Thank you for that, Alvaro.

So I'm just going to sum up a bit, because there’s some questions you got asked over and over again. But listen guys Q2 obviously was a tough quarter for everybody.

We've come through it and made a tremendous amount of progress. Every single prescription that goes out the door is helping somebody that is very gratifying for us and the entire staff of Khiron.

At the end of the day, everything that we're working on in Columbia right now is about service, how do we service people, how do we educate people, how do we follow-up, that's why we're getting really good traction with these numbers, as far as people coming back for prescriptions again and again, moving online, moving now to mobile with Dr. Zereniavery, very exciting times for us to deploy that technology and really prove to everyone that we can scale this business, not only in Columbia but around the world.

International distribution has its own merit. Every time we break down a new country, that's tremendous value for us.

And you're going to start to see real evidence of those international sales in Q3 and then going into Q4. So with that, there's one more question here.

So, the question just was like in the big difference between spending in Q4 and Q1 compared to Q2, most of that changes were G&A. Right now, we're focused on top-line growth.

So, what I'd say for the next quarter or two, I wouldn't expect expenses to be meaningfully lower. We're always looking to save but right now, we're trying to grow as fast as possible.

We have obviously the cash to do that. We've said that over and over again that we have the cash to get ourselves to profitability.

And I think what you see there with the spend in Q2 is you're seeing real evidence of that fact. It's a game changer for us to get these expenses in line.

Now that we're done we're not building anything more at the the facility. Our CapEx spend was very, very low.

And now I guess all of us were saving on travel as well. So, there’s those kind of things that will persist and there is some more.

So, this is a question on competition from Shane. Listen we don't comment on the competition but we're happy to point out the evidence.

So right now, in Columbia, we're the only company. We're still -- as far as THC for medical in Colombia, if you've been on Khiron, we have 100% percent market share today.

That won’t be forever but right now that is the lead that we have. And probably 2021 we are also the only ones doing THC.

So you will see us enter that German market as well. And I just encourage people look at the evidence of that that we are executing and now we're in growth phase.

And we’ve got the capital to do so. So without any more questions or any other comments that we want to leave in, [Multiple Speakers] more [Indiscernible].

Yes, last question on competition, which I think is very, very relevant. Of course, we have to look market by market but we start here with Colombia.

We are not competing. I think there is -- we welcome the fact that there’s other Colombian companies that are growing cannabis that are selling abroad, that's not the business we're in.

Our competition really for us is pharmaceutical companies that are going to come up with products, that are going to be a competing with us in terms of being able to approach that [pace]. The reason we acquired the clinics, the reason why we move so much to healthcare, is because from the beginning when you look at -- if you want to win and you want to be -- make your competition relevant, you have to be on service.

We focus a lot of on telehealth, we focus a lot of on delivery at home, we focus a lot on these things that we don't talk about every day, because I believe and I still look at it and particularly from the results that we're seeing in terms of the curve that we’re seeing in terms of prescriptions per day that we are going to be on service. We are not in the B2B business.

So we're not in the business of selling seeds, or selling extracts. And I think that would be fantastic overall but for us, it's about getting that branded product.

We're in the business of selling that bottle from, let's say, $45 in wholesale to $65 in the UK to $150 a month -- sorry pound a month, and we're focused on that brand and what that brand means. And it takes a little longer to be able to do those things.

But I think that's where you start building sustainable value but not being interested in selling and focusing on how many shipments we can make, because my point is how do we make this sustainable and sustainable is about building that brand and making that connection. So our competition, it's about a pharmaceutical companies.

And when do they start to enter the market, and how do they approach the patient, and how do we capture those patient, how do we make sure those patients remain in our program. We're not here to sell bottles.

We're here to sell our programs. We're here to sell improving the quality of life.

And the reason why and going back to one of the question I saw, [Jeff], absolutely. You're looking at Q2 and saying well, those are not the sales that we expect.

No, no, no, particularly in the middle of this pandemic. But what I'm more focused on also is what do those trends show us, where you can per se now we're doing 9 times, 10 times the prescription a day that we used to do and that starts to show how do we get to 100 times?

How do we start doing 200 prescription a day, 300 prescriptions a day? We just don't make sure in those type of things, just multiplying that by the number of days you have left or the number of days you have in the rest of the year.

That's just to show us that there's a tremendous value for us to be very successful and we don't have to wait that long. Of course, the pandemic means that people don't go out that when the government declared quarantine, really it was a shock for the entire system.

But the fact that we're able to go up and be able to get these number of prescriptions per day, the number -- the fact that we now have, let's say, 20 to 25 doctors prescribing every day in our clinics, and how can we bring outside clinics to do the same? And right now, we don't see any prescription out.

Of course that will come. But we're more focused on the service and the patient retention.

And our [Quiero] program, which is a program that we've implemented to follow up on the patients. And the fact that they can do telehealth and the fact that you can actually make your life easier that's how we retain patient, because remember that a patient that we retain is cheaper to retain than the one that we have to acquire.

So they're very focused on that patient retention. In Peru there is -- and probably a lot more competition, the same in Brazil.

But we're going to bring the same approach, bring approach of 20 doctors making partnership with clinics, being there for the patient, making sure that every patient we capture we can have a good probability of retaining him or her. And I think the UK, I think 2021 gives us a tremendous advantage in terms of competition, because there's only five companies there.

And in Germany, which is a lot more completed, we are taking this slowly by slowly. And the more we can keep training doctors, the more we can keep bringing our brand, the more stories we can share about patients and improving and for those of you who may follow us on LinkedIn, you can see that we already started to push a lot of these stories.

A six year old girl who is having epilepsy, that being taking our products and they haven't had episodes for the last 30 days. Chronic pain patients of 75 years old.

These stories, these things that we start to tell patients start to build a brand and a narrative that we think it's going to be hard to [Indiscernible]. But we're certainly not in the business of selling extracts to B2B business.

So we don't consider any of these companies our competition. In fact, we consider other businesses our partners, because we purposely having build what we build in this company.

We have one very nice facility with the other solar power project, so we can reduce our costs. But it's not just selling our products to start building, and building, and building more hectors of lands where we can have a lot of potential goods Colombian partners or Peruvian partners, or Uruguayan partners, or Brazilian partners, or European partners, that can make the products as to our specs with very low cost.

I mean, if you look at B2B business I think at kilo CBD isolate was fairly for 25 grand in January 2019 and now it’s selling in Colombia for $1,500 a kilo. So if you find the right quality, you find the right partners.

We are all about building that demand and that demand is growing exponentially with the numbers that we've mentioned. So I just wanted to touch on that point when we talk about competition and what we actually do compared to the rest of the company, I think all of that is more than welcome.

I think the more supply there is of high quality the better it will be for the patients. But we're here to build the demand and then all of that will just be advantageous for us where we're building that supply chain, which is exactly what we're doing when we start to grow.

So we don't need to grow our sales when we can have other partners that continuously, because of the overall amount of the -- or supply that there will be at Colombia, let's say, a year from now, I think is going to be advantageous for us to be able to work with a lot of these partners, get the right products at the right price and maybe even make a better margin, because we're focused on that demand.

Thank you for that Alvaro and thank you for all the time questions and remarks here in the chat box. I'm just going to rip through a couple last ones here before we sign off.

And Wendy if you have any other comments, please let us know. One comment here Alvaro is about the solar plant and how is that working.

As we did announced that in status completed and in operation, it makes us much less reliant on the grid and on diesel. So that project is up and running and complete, and it's quite a beautiful thing.

I think there's some photos on the Web site if you wanted to see that. Another one here in competition about from pharmaceutical companies down the road.

Well, listen, I think that this business is going to be very, very competitive. And as we try to share, we try to communicate the clinics, the doctors.

This is about service at the end of the day, it's not about even costs or anything like that. It's about helping patients one by one by one, and getting all those doctors and all the clinics going in the right direction to be able to safely prescribe this medication and feel good that they're doing the right thing.

I would say, based on that -- is that what we have experienced in the last four months ourseleves. I think competition and the fact that eventually right now there's one pharmaceutical company in Colombia selling, I'd say a high, very high CBD product.

Those are things that help, because we've been building this market by ourselves. And we've been growing tremendously over the last month and a half, we will keep growing the patients in our clinics.

But the more mainstream this becomes, also, I think it’s going to make our efforts pay off, because when you're opening a new market and you're building a brand I think Khiron is well recognized and Zerenia as well. I don't think there's any doubt about that in the region, but it's also important to have more companies that are able to talk about these thing.

The competition with pharmaceutical companies we welcome it, because since we started -- since I founded this company three and half years ago with my partners, we knew this, this is the way that’s going to be competed. But we have two and half years to understand what kind of disease, how we can connect with doctors, we're doing each in a different way, which is called registry preparations, which are not necessarily something that's easy for everybody to understand.

But we’ve been growing and the more we grow then more companies will say, maybe this is interesting. But all the time that you're gaining and building that brand and that relationship with the doctors or with the patient is paying off right now.

And so as I said, if we can have a really good service, which is not just about the bottle, it's about I can have in telehealth, I can have it delivered at home. I have a program in which they follow me on.

These are things that we've been trying to build for the last we started company. So we welcome that and we welcome the fact that more people want to talk about cannabis, because we don't want to be the only ones.

We just thing that once that market starts to consolidate, I think we are continually going to be the leaders, because we have all these patient stories, we care about the patient, the doctors and I think that's really what we want to build and that reputation it's easily transferable to any country that we’re in. And if we imagine ourselves, let’s say six months from now where we are in full speed ahead in Colombia, Peru, Brazil, UK and Germany and you can talk about a company that’s selling products in these five markets with the same type of philosophy that’s -- we’re here to do as a company, which is the same reason that we did with Kuida.

Our Kuida strategy is about being able to tackle the global CBD opportunity and we have a great product to do that. And we decided to sort of stop doing a lot of the things that we want to do in the efforts of being able to go through what COVID is going to show us.

But what's happening now, you don't -- it's not just any product that can get into to Hong Kong, it's not just any product that can get into Spain. And so those sales we start showing up and they will be quite significant compared to what Kuida was doing here in Colombia.

And as I said before, we're working on very interesting distribution strategies of the rest of LATAM, and we're also switching our strategy from trying to do out ourselves to partner with distributors that can take a lot more of these risks, so that we can reduce our G&A. So I think all of that is what we decided to do from the beginning, building brands, connection with consumers and those are the things that last.

So we still don’t think that we are -- and we're not build to be a commodity player and we just want to continue building those demands and making those margins 50% and above and more important that making them sustainable.

Last, very last question Alvaro just on insurance coverage. Any updates on insurance coverage?

Well, we've be working with that for the last year. I think now the fact that we have our own clinic and we start doing all these amount of prescriptions, we're going to start -- we already had conversations with insurance companies to begin these programs.

Of course, you can understand right now in the middle of pandemic all they care about is COVID and the cost of all these things that you have to pay for. But what is the fact is that the evidence that we are building is going to be very useful for us to be able to have a conversation with them in Q4 of this year, and see how we can start Q1 of 2021 with a positive look at how we can get these covered.

I cannot give you much more details on what we do in the day-to-day but as said from the beginning that this is one of our goals. And I think everybody's working on now what is the socio-economic benefit now that we have patients that have been on this program for three months, you can actually start showing the insurance companies the benefits on costs and the benefits on health.

You cannot do that before that, because you don't have enough evidence to show this to patients, but you are talking about 2,000 prescriptions, let's say 1,000 prescriptions in the last -- one we closed this week in the last 25 days then it start showing a lot of evidence. And that it is going to get insurance companies to pay for it, that is going to happen.

And there is also the fact that we are the ones that are pushing this insurance and there will be a matter of time before we can get the government to put it into the medical system. If you look at what's happening across place, for example, for everybody in Brazil the last decree that was published I think last couple of days, every government are already talking about including cannabis as part of the insured type of products.

So, how do you get it done with evidence, with conversations and I think it's just a matter of time. But we are working aggressively to get that done as quickly as we can.

Thank you for that, Alvaro. So listen, I think we're going to signing off there.

Thank you everyone for coming. Last time we talked to you after Q1 we had made our, just our very first sales in Colombia.

Now the company has made a lot of progress next time we come to you, you'll see the sales in the UK, in Germany, in Peru, in Spain, all of that happening now in Q3 and accelerating into what we hope to be a really good Q4 for the company. So the company continues to hit all these milestones and open up all these markets, and it's a lot of work.

And then especially in this environment, it's a lot of tough work. But we continue to be on track for a good year this year.

So, I just want to thank our shareholders for all your support. Thank you to Wendy and Alvaro and everyone else with the help to set up this call today.

Thank you, Chris. Thank you everybody.

And happy to talk to other investors and shareholders, and more than happy to answer any questions you may have [Indiscernible] as well.